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ESTABLISHMENT OF 2000 BROILERS UNDER DEEP LITTER SYSTEM OF

REARING - INTERNSHIP PROJECT REPORT

Technical Report · January 2017

DOI: 10.13140/RG.2.2.33562.70082

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ESTABLISHMENT OF 2000 BROILERS
UNDER DEEP LITTER SYSTEM OF
REARING
INTERNSHIP PROJECT REPORT

Submitted by
SHARUN KHAN
(12-BVM-26)

Under the guidance of

Dr. BINOJ CHACKO
Senior Scientist
AICRP ON POULTRY IMPROVEMENT

Submitted to Kerala Veterinary and Animal Sciences University in partial fulfillment

for the requirement of the degree of BVSc. and A.H programme.

COLLEGE OF VETERINARY AND ANIMAL SCIENCES MANNUTHY

KERALA VETERINARY AND ANIMAL SCIENCES UNIVERSITY
POOKODE WAYANAD
2017 – 2018

1
 DECLARATION

I, SHARUN KHAN (12-BVM-26) a bonafide student

(internship trainee) of 5th year BVSc & AH in College of Veterinary and Animal Sciences
Mannuthy, Kerala Veterinary and Animal Sciences University, Pookode Wayanad would like
to declare that the project report entitled “ESTABLISHMENT OF 2000 BROILERS ON
DEEP LITTER SYSTEM OF HOUSING” submitted by me in partial fulfilment of the
requirements for the degree of BVSc & AH is my original work. It has not been submitted
before for any other degree, part of degree at this or any other university.

MANNUTHY SHARUN KHAN

1-5-2018 12-BVM-26

2
 CERTIFICATE

This is to certify that this project report entitled “ESTABLISHMENT OF

2000 BROILERS ON DEEP LITTER SYSTEM OF HOUSING” submitted to COLLEGE
OF VETERINARY AND ANIMAL SCIENCES MANNUTHY, KERALA VETERINARY
AND ANIMAL SCIENCES UNIVERSITY POOKODE, WAYANAD is a bonafide record
of work done by SHARUN KHAN (12-BVM-26) under my supervision from “09-01-2018”
to “15-01-2018”.

MANNUTHY Signature of the Supervisor

1-5-2018

3
 ACKNOWLEDGEMENT

I humbly express my deep sense of gratitude to my beloved guide

Dr. Binoj Chacko, Senior Scientist, AICRP On Poultry Improvement, Mannuthy for his
encouragement, guidance and support for the successful and timely completion of this work.

MANNUTHY SHARUN KHAN

1-5-2018 12-BVM-26

4
 CONTENTS

SL NO TITLE PAGE NO

1 Introduction 6

2 Objectives 7

3 Project particulars 8

4 Project formulation 9

5 Economics of broiler farming 10

6 Details of investment 11

7 Flock chart 12

8 Income expenditure statement 12

9 Repayment schedule 13

10 Cash flow statement 14

11 Calculation of NPV and BCR 15

12 Conclusion 16

5
INTRODUCTION

Poultry is one of the fastest growing segments of the

agricultural sector in India with around eight percent growth rate per annum. The poultry sector
in India has undergone a paradigm shift in structure and operation which has been its
transformation from a mere backyard activity into a major commercial agri based industry over
a period of four decades. The constant efforts in upgradation, modification and application of
new technologies paved the way for the multifold and multifaceted growth in poultry and allied
sectors.
Calendar year 2017 broiler production is projected at 4.5
million tons, up by approximately seven percent from last year on rising domestic demand for
poultry meat. The growth in the broiler segment is expected to remain strong due to consumer
preference for chicken meat, increasing income levels, and changing food habits. The live
market sales of broiler meat still constitute more than 90 percent of total sales volume as most
consumers prefer freshly slaughtered chicken meat; the processed chicken meat segment
comprises only seven to ten percent of total production according to industry sources. More
than 80 percent of India’s chicken output is produced by organized commercial farms. Major
poultry companies have vertically integrated operations which comprise approximately 60-70
percent of the total chicken production.
These major companies, also called integrators, own
hatcheries, feed mills, and slaughter facilities and may also provide credit, extension services,
and veterinary medicine. Integrators contract with multiple smaller farmers who raise the
chicks to slaughter weight primarily in open air sheds. The live birds are then either purchased
by the integrators for slaughter and further processing or by a wholesaler who distributes them
via live markets.
Broiler production is mainly concentrated in the states of
Tamil Nadu, Andhra Pradesh, Maharashtra, Uttar Pradesh, and Telangana. Industry sources
indicate that the most preferred broiler breed is Vencobb due to its fast growth, feed efficiency,
and ability to withstand extremes of temperature and humidity. The Vencobb breed reportedly
constitutes around 65-70 percent of the broiler market. The grandparent stock for Vencobb is
owned by one major enterprise which sells parent stock to multiple integrators throughout

6
India. Other popular breeds in India include Ross, Marshall, Hubbard, Hybro Avian, and Anak.
The broilers in India are typically reared for 35-40 days to a market weight of 1.8 to 2.2 kg.
The feed conversion ratio for broilers has reportedly improved considerably over the years to
1.65 from 2.2 in the 1990s.
The size of the poultry farms varies significantly from small
farms with just 200 birds to large farms of more than 50,000 birds. Most of the poultry farms
are simple open sheds while only a few large poultry integrators have controlled-environment
housing with automatic feeding and drinking systems. High capital costs and unreliable power
supplies limit large scale adoption of the controlled environment poultry barn model in India.
Commercial poultry farming has achieved momentum in
Kerala because of its wide and varied potentials capability of employment creation, low
investment, quick returns, lesser combination of various factors of production, enhanced
productivity per unit of agricultural land, maintenance of soil fertility etc. Depending on the
farm size, broiler farming can be a main source of family income or can provide subsidiary
income and gainful employment to farmers throughout the year. Poultry manure is of high
fertilizer value which can be used for increasing yield of all crops.

OBJECTIVES

1. To establish a broiler poultry unit having 2000 poultry birds per batch.

2. To produce quality meat for the public at comparatively cheaper rates.

3. To meet our day to day needs of poultry meat.

4. To produce high quality poultry manure for enhancing agriculture.

7
PROJECT PARTICULARS

LOCATION
The project is intended to implement in an area of 15 cent of land in Mannarkkad Municipality
of Palakkad district. Area is away from dense human dwellings, with good drainage facilities,
abundant water supply and very good access to electricity, telephone, main road and market.

LAYOUT AND PROGRAMME

The project aims at rearing 2000 broiler chicks per cycle with a cycle length of 54 days (40+14)
and 6 cycles per year. Expected average body weight is 2.2 kg per bird with a maximum FCR
of 1.6 and each broiler chick is sold at an age of 40 days @ Rs. 85 per kg body weight.

HOUSING
The shed will be constructed on a low cost basis and each bird will be given 1.25 sq. feet floor
space. Provision for drinking water and feeding will be given in shed. Poultry manure will be
stored in a manure pit and will be sold as organic manure.

CARE AND MANAGEMENT

The entire care and management including feeding, cleaning etc. will be done directly under
the supervision of the proposers. Strict hygiene and sanitation will be maintained in the farm
to avoid any disease outbreak. Scientific feeding and management will be followed as per the
expert advice in this project.

AVAILABILITY OF INPUTS
Farm inputs mainly chicks may be purchased from various authorized farms in the area.
Usually day old chicks are to be obtained. Other inputs like feed ingredients, equipments,
medicines & vaccines are available from veterinary institutions and local market. Sufficient
portable water is available in the farm itself and power line passes through the farm site which
is easily available. The technical veterinary and nutrition advises will be obtained from various
veterinary institutions in the area.

8
PROJECT FORMULATION

A project can be prepared by the promoter after consulting local

technical persons of state veterinary / Animal husbandry department, Poultry Corporation or
private commercial broiler hatcheries. If possible they should also visit the progressive broiler
farmers in the area and discuss the profitability of farming. A good practical training and
experience on a broiler farm will be highly desirable, before starting a broiler farm. The project
should include the following information on technical, financial, and managerial aspects in
detail based on type of unit and capacity.

(location area suitability, proximity to road site map etc)

l structures (sheds, feed room and office room)

, waterer, cleaning equipments)

- deep litter system, area required)

water, power fuel)

roject cost capital (building equipments, other facilities etc.)

9
 ECONOMICS OF BROILER FARMING
TECHNO-ECONOMIC ASSUMPTIONS FOR PRODUCING 2000 BIRDS/CYCLE
1 Total land cost( 15 cents) 0
2 No. of birds (per cycle) 2000
3 Rearing period (days) 40
4 No. of cycles per year 6
5 No of birds sold in a year(2% mortality) 11760
6 Cost of DOCs (Rs./chick) 29
7 Livability in 5-6 weeks (%) 98%
8 Floor space requirement per bird 1.25 sq. ft.
9 Total floor space of poultry house 2500
10 Space for other buildings (sq.ft) – store room 200
11 Poultry house cost (Rs./sq.ft.) 200
13 Cost of electrification (Rs./bird) 10
14 Equipment cost (Rs./bird) 20
15 Feed requirement (kg./bird) 3.52
16 Feed cost (Rs./kg) 30
17 Expenditure on labour (self-employment) 0
18 Over heads cost (Rs. / bird) 8
19 Average body wt. of birds (Kg./bird) 2.2
20 Price of bird (Rs./kg) 85
21 Sale price of bird (Rs./bird) 187
22 Income from manure (Rs. per kg) 2
23 No. of gunny bags (per 100 kg of feed) 2
24 Income from gunny bags (Rs./bag) 7
25 Depreciation on sheds (%) 10
26 Depreciation on equipment (%) 20
27 Margin money (%) 25
28 Interest rate (%) 12.5
29 Repayment period (years) 6
30 Grace period (years) 0.5
31 Rest period for sheds (days) 14

10
DETAILS OF INVESTMENT

FIXED INVESTMENT

Non - Recurring Expenditure:

SL. NO. PARTICULARS Rs.
1 Land cost (Rs.) 0
2 Cost of building
Total cost of sheds (2500 sq.ft.) 5,00,000
Cost of other buildings (200 sq.ft.) 40,000
3 Equipment cost (Rs.) 40,000
4 Electrical installation cost 20,000
Total Non-Recurring Expenditure 6,00,000

Working capital
SL. NO. PARTICULARS Rs.
1 Cost of birds 58,000
2 Feed cost 2,11,200
3 Overhead charges 16,000
4 Labour cost 0
Total working capital 285200

Total project cost Total Non-Recurring Expenditure +

= Rs. 8,85,200
Total working capital

BANK LOAN

SL. NO. PARTICULARS Rs.

1 Loan from Bank 4,50,000
2 Margin Money 1,50,000
Total Non-Recurring Expenditure 6,00,000

11
 FLOCK CHART

Year No. of Batches Introduced No. of Batches Sold

I 6 6
II 6 6
III 6 6
IV 6 6
V 6 6
VI 6 6

INCOME-EXPENDITURE STATEMENT

EXPENDITURE

Particulars I year II year III year IV year V year VI year

Cost of chicks 3,48,000 3,48,000 3,48,000 3,48,000 3,48,000 3,48,000
Cost of feed 12,67,200 12,67,200 12,67,200 12,67,200 12,67,200 12,67,200
Labour cost 0 0 0 0 0 0
Overhead cost 96,000 96,000 96,000 96,000 96,000 96,000
Depreciation on 54,000 54,000 54,000 54,000 54,000 54,000
Building
Depreciation on 8,000 8,000 8,000 8,000 8,000 8,000
Equipment
On interest 56,250 46,875 37,500 28,125 18,750 9,375
Total
Expenditure 18,29,450 18,20,075 18,10,700 18,01,325 17,91,950 17,82,575

12
INCOME

Particulars I year II year III year IV year V year VI year

Sale of birds 21,99,120 21,99,120 21,99,120 21,99,120 21,99,120 21,99,120
Sale of 84,480 84,480 84,480 84,480 84,480 84,480
manure
Sale of gunny 5,915 5,915 5,915 5,915 5,915 5,915
bags
Total income 22,89,515 22,89,515 22,89,515 22,89,515 22,89,515 22,89,515

Net Income 4,60,065 4,69,440 4,78,815 4,88,190 4,97,565 5,06,940

REPAYMENT SCHEDULE

Year Profit Principle Interest Total Balance Surplus

debit
I 5,78,315 75,000 56,250 131250 375000 4,47,065
II 5,78,315 75,000 46,875 121875 300000 4,56,440
III 5,78,315 75,000 37,500 112500 225000 4,65,815
IV 5,78,315 75,000 28,125 103125 150000 4,75,190
V 5,78,315 75,000 18,750 93750 75000 4,84,565
VI 5,78,315 75,000 9,375 84375 0 4,93,940

13
CASH FLOW STATEMENT

Particular I year II year III year IV year V year VI year

s
Inflow
From Sale 21,99,120 21,99,120 21,99,120 21,99,120 21,99,120 21,99,120
of birds
From sale 84,480 84,480 84,480 84,480 84,480 84,480
of manure
From sale 5,915 5,915 5,915 5,915 5,915 5,915
of gunny
bags
Total 22,89,515 22,89,515 22,89,515 22,89,515 22,89,515 22,89,515
Cash
Inflow
Outflow
On chicks 3,48,000 3,48,000 3,48,000 3,48,000 3,48,000 3,48,000
On feed 12,67,200 12,67,200 12,67,200 12,67,200 12,67,200 12,67,200
On Labour 0 0 0 0 0 0
On Over
Head 96,000 96,000 96,000 96,000 96,000 96,000
charges
Total 17,11,200 17,11,200 17,11,200 17,11,200 17,11,200 17,11,200
Outflow
Net Cash 5,78,315 5,78,315 5,78,315 5,78,315 5,78,315 5,78,315
Inflow

14
 Calculation of NPV and BCR

Years 1 2 3 4 5 6
Capital cost 6,00,000
Recurring 17,11,200 17,11,200 17,11,200 17,11,200 17,11,200 17,11,200
cost
Total cost 23,11,200 17,11,200 17,11,200 17,11,200 17,11,200 17,11,200
Total 22,89,515 22,89,515 22,89,515 22,89,515 22,89,515 22,89,515
benefit
Net benefit -21,685 5,78,315 5,78,315 5,78,315 5,78,315 5,78,315
Discount
factor at 0.87 0.756 0.658 0.572 0.497 0.432
15%
Disc cost at 20,10,744 12,93,667.2 11,25,969.6 9,78,806.4 8,50,466.4 7,39,238.4
15% DF
Disc benefit 19,91,878 17,30,873.3 15,06,500.9 13,09,602.6 11,37,888.9 9,89,070.5
at 15% DF
NPV at
15% DF - 18,866 4,37,206.1 3,80,531.3 3,30,796.2 2,87,422.5 2,49,832.1

NPV at 15% = 16,66,922.2

B:C ratio at 15% = 1.338

15
 CONCLUSION

FEASIBILITY

BENEFIT COST RATIO: 1.34

Since the benefit cost ratio is greater than one, the recommended project proposal is technically
viable and economically feasible. It has been prepared based on present marketing conditions
and scientific management principle. The loan amount can be easily repaid within 6 years.

16

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